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tv   Markets Now  FOX Business  February 4, 2013 11:00am-1:00pm EST

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stuart: we just had time to squeeze in the "highlight reel." >> president obama and harry reid wants more "revenue." >> and looking to expand it. >> republicans would have been blamed for any tax increase on the middle class. >> the end result being he takes more money off of wealthy
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people. >> it slows us down gradually. >> many can say texas don't matter. of course they will in the long run. stuart: here we come. what a perfect moment to throw it to dagen and connell. connell: good morning, everyone. dagen: america is a good bet. here to tell you why. connell: one of our guests in this hour could be the next energy secretary. dagen: more on the power outage and the record-breaking at cbs sports for that incredible game. connell: and cyber attacks, the white house considering action against china. dagen: i had the ravens, did you? by a field goal, 27-24. connell: nobody knows football like dagen mcdowell.
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clearly. dagen: stocks now has to do every 15 minutes, nicole petallides at the new york stock exchange. nicole: a good bet going. if yo you're betting on the mar, 14,000 mark a little disappointed today, we are pulling back, dow jones industrials down 116 points right now. a majority of the dow components, 28 of the 30 were in the red, only two names, green arrows, there is ro rod-based selling going on, the retail stocks all with down arrows. some of this is coupled with number one, very far, very fast. and you have a strong dollar, worries of europe once again factoring in. and they look at oracle, up over 1%. down 1.6%.
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up over the $2 billion deal. obviously the equato acquirer cg in. dagen: energy attorney announced friday he will be leaving that post pending confirmation of his successor. who could be his successor? one rumor if it could be our next guest. at least on the short list right now. joining us now, former north dakota senator, good to see you. are you open to the idea, as the white house talks to you about this yet? >> this is just part of the speculation in washington, speculation in these cases. i doubt that will happen. dagen: why? only because you are from north dakota, the center of a booming, growing future energy
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business in this country, really the future of our own domestic supplies, so wouldn't you be a logical pick given what you know about that business? >> i am not doing the picking. he has a lot of people for which to choose. north dakota has unbelievable amount of energy developments going on. it is really exciting. transformational for this country. dagen: it is so transformational it made the magazine, the cover story. in one issue the article raises, how is this boom different from the one that went 30 years ago. >> we had a boom back then and they bust. that was a time they were looking for oil under the ground. that is not the case, they know exactly where the deposit is so we are very large areas. they drill 7000 wells in north dakota at this point.
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they intended to grow between 30 and 40,000 wells because they know exactly where the deposits are 2 miles down, they don't drill dry, so the amount of additional oil and gas production is staggering, nobody would have predicted it. it is awfully good news for our country. dagen: what needs to happen to be sure this expiration and production continues in this nation? that is sort of a policy question, what is not happening in washington that needs to happen to keep the boom running? >> don't think there is anything not happen. we have to produce 25% of oil right now than we did four years ago during the previous presidential election. so we are producing more and more oil and natural gas as a result of this new approach to drilling. i expect that to continue because it is such good news for the country. there are some issues, hydraulic
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fracturing is becoming controversial, but we have done that for 50 some years. you have to do it the right way to be productive of water and staples of other things, but we have done it for a long time and if done correctly and properly regulated, it will be just fine. dagen: great to see you. keep us posted, let us know what is going on. take care. connell: you guys are talking a lot about energy. energy giant halliburton looking to clean up, sort of. offering a non-toxic tracking fluid used with food industry ingredients only in the new product is more expensive than other fluids but safer for the environment. checking the stock, how burton down a little bit today. japan airlines grown in the dreamliner will cost the company nearly 7.8 million in revenue. after a battery united flames and smoke. japan airlines said it would seek compensation from boeing
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for the lost revenue. they have yet to identify the causally battery problems. and the numbers are in for the super bowl. 48.1, better than ever for the nielsen numbers beating last year's giants and patriots. a great game last night. twitter also exploded, 24 million plus about the game. the peak came at halftime when beyoncé was performing. dagen: you would think that is the overall, but some people turn their tv sets off during the power outage because it was such a lead, looks like he was stinking. connell: they say the game with the two quick touchdowns right after the power outage and 28-20, so much for this, i will not go to bed, and it went later
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than we thought because of the power going out. dagen: a little new orleans voodoo working magic against the ravens. oh well. great game. the length between china and the hack attacks on america's media outlet has the white house ready to take action. connell: and forcing movement on the budget and our nation's debt, the house speaker wants a budget done from the president. dagen: with the federal reserve focus on jobs, investors are looking to smaller companies, small cap stocks to calm worries about inflation. and speaking of inflation. talking about oil. almost skyhigh. [ woman ] if you have the audacity to believe
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dagen: china reported plans to increase that role for solar power installations in 2015 by 67% to reduce reliance on fossil fuels. connell: charles payne has been going global lately joining us to talk about solar company. dagen: he is dressed like a european gentleman. connell: very stylish. charles: as always. one of the hottest chinese solar companies back in the day. all of them traded up nice today. huge volume, they completed 128 in dollars expenditures, that is huge. we are raising a lot of money to put it to work to expand capacity. a couple of years ago there is a ton of pollution coming from one of the main plants and the fish
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in the nearby river were turning up dead. protest went crazy. it was in shambles, but i think they have gotten their act together, it is an example or in exclamation point on that. since enacted a tariff, all of these stocks are much higher and they will continue to go higher. dagen: what about the government subsidies and the government gets from china? over there, hello, they are leaning on the government. charles: they have a lot of influence. a year and a half ago, don't look for consolidation comes to look for the companies who simply go out of business. they would rather die than be acquired. wwe're seeing some of that. a lot of the rivals are gone. those that remain get a lot of bank loans and these stocks are acting good. once the business comes around and the government spend more
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money, you will see gains. charles: everybody is enthusiastic. a lot of people are focusing on the domestic economy. connell: i hate the media, by the way. charles: don't you? the gdp report was great. the thing that was posted last week was really good. certainly a lot of yellow flags. dagen: hangnail, blame the media. john is, blame the media. connell: let's go to bob, talk about betting on american companies. joining us by telephone today from annapolis. always great to have both on the show.
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we pull back a little bit today, your positive on the market overall though. what do you make of where we are right now? >> we have come a long way in a short. of time. surprised it didn't happen sooner in my view. i think we are digesting the games. but will we get acceptable economic growth, acceptable earnings growth and will the risks like u.s. politics stay out of the way? the answer is yes and my guess for now it is yes. the path of least resistance is higher. connell: even if you are right, people say boy, initial investors, we will talk later about the fact they have been getting more involved in the market and the inflow starting to look better on that front, but some of them say we've had a nice run above the 14,000 last week, i missed it, should've gotten in earlier. they're looking for a big pullback, is that the wrong way
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to go about it in your view? >> i would step up my purchases, i would not try to time it if i had earmarked for the equity market. we have avoided the fiscal cliff posted on the debt ceiling. earnings are decent, decent economic indicators here and outside the u.s. on balance is good, not everyone of them. we have central bankers all over the world, but begging for reflation putting money in the system and a lot of cash getting zero return and those things i think are the reason the stock is likely to continue going. connell: that is the last one i want to pick up on because reading your most recent numbers is lack of tolerance for the cash balances giving a zero return, so people do look and say i can't get a return for a decent yield on anything, so i would rather be in stocks than any kind of fixed income class. if any of that changing in the
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future, and if so at what point? interest rates have to go up some point, don't they? >> i think they will continue to creep higher, but they can't go a lot higher because the economy would then weekend. so i think as we globalize and the rate race will continue hig, but a lot of cash out there saying when things were volatile in the wrong direction, meaning down, my return of my capital, if you will. now the stocks have been going higher. maybe i need just a little bit more there. connell: a pretty good economy today. that is pretty much how you sum it up? >> acceptable economy, grinding higher equity market. connell: glad to talk to you. joining us from minneapolis. dagen: it is almost a quarter past the hour, nicole is still
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standing by at "markets now" looking at wal-mart. nicole: i am. wal-mart a huge retailer that we are focusing on. today down 1.7% drop of $1.17. and now we're talking about wal-mart because jpmorgan actually cut their price target to $75, you still have upside potential, but they say the company is doing what they do best, continued to do well but the low hanging fruit has peaked, so this is why they fadesayit is more of a challengg environment that is why they brought all of the downgrade this morning to neutral from overweight at jpmorgan. look at the broader market and how we are faring. both gained over 5% in january, a run-up of the nasdaq. we hit some key milestones, but there are concerns once again about europe.
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the dollar is fairly strong, the few indexes back tire. traders are not surprised to see a little bit of a pullback here on this monday morning. connell: charles payne talking about china and the media with the chinese cyber attacks reported on big media companies. this could prompt action for the white house. dagen: straight from capitol hill, new legislation forcing them to balance the budget. and take a look at how the world currencies are holding up against the dollar. the weakness against the euro very dangerous if it continues. the euro is lower today, $1.35.
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>> 22 minutes past the hour. your "fox business minute." 18 people dead in a tour bus crash. the bus careening out of control and narrow mountain road late. 80 people injured. the driver reported brake
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problems. in alabama, it is now seven days a gunman has been holding a five-year-old boy hostage in a bunker. 65-year-old jamie lee dyke shot and killed a bus driver, took a boy and his underground with him. the boy will turn six on wednesday. anin last night's super bowl por outage caused by another malady electrical fencing equipment, that is the statement being provided by the energy company for the blackout at the superdome. power was cut and backup generators kicked in. those are your headlines. connell: certainly abnormal. dagen: that explanation makes no sense. we all know the power went out in the biggest sporting event of the year and the highest television broadcast of the year. the white house weighing tougher
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actions against china after both the "wall street journal" and "new york times" reported late last week their computer systems have been hit by china-based hackers. connell: all the details on this story with peter. peter: the administration appears to be getting ready to be tough on china over computer hacking. the new government report released shortly slated to call the rising chinese attacks a threats the u.s. and its economy. they announced recent attacks on the computer systems suspected of originating from china, social media site twitter set extremely sophisticated hackers from an unidentified source may have stolen user names, e-mail addresses and passwords of 250,000 customers. the u.s. has made little progress in negotiations with the chinese to stop this kind of
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hacking, now u.s the u.s. is considering economic and diplomatic steps to fight it and according to the financial times, for information sharing between washington and private companies to protect critical systems and infrastructure like power grids and information systems. >> we have had and have been very clear about our substantial and growing concerns about the threat of economic national security posed by cyber intrusion including the theft of instrumentation. we have been clear with the government of china that we need to begin to talk about this. peter: administration will not comment on their plans. chinese officials denied china is behind all of these attacks. connell: some breaking news coming in from charlie gasparino on this developing story from
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herbalife. the details coming in with charlie reporting on this. telling people the company believes it is not the subject of an ftc investigation. reports to that effect killing the stock. reporting officials had not been approached. they will likely have a statement may be a little bit later on whether the subject of an ftc probe. telling people a company believes it is not the subject of an ftc stock. dagen: with more americans using their handhelds for everything including shopping. the government is ready to act. connell: our lawmakers on capitol hill said to push forward with a balanced budget proposal? will look into that.
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and the market getting pretty bad today, down 112, but we have individual stocks doing well. here are some of the winners on the s&p 500. this is $100,000. we asked total strangers to watch it for us. thank you so much. i appreciate it. i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money? if your bank takes more money than a stranger,
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connell: the call to balance the budget, house republicans want the's plan right now. david stockman is here to talk to us. with privacy controls on your mobile device with more americans using their hand helds through the internet, the
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government's ready to act on that. and we have an argument coming up for small cap stocks, so we'll get to that as well. craig taig yes, small cap. russell 2000 closed at a record high on friday, incredible. bottom of the hour, stocks now and every 15 minutes, nicole is at the new york stock exchange with more on herbalife. nicole? >> reporter: all right. let's take you over to the post. we've been following this story for you, very closely with what's going on with herbalife since the middle of december. take a look at how the stock faring right now, down almost 4.5%. now, the company says it has not been approached but the sec, but the probe is still underway. they're feeling the heat at this time. we've been watching both ackerman and icahn talking about herbalife. very headline-driven stock. so we'll p continue to follow that one for you. as far as the major market averages, plenty of red on the
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screen here. we've watched dow jones industrials down 114 points, so that certainly has been a big loser as the dollar has been extremely strong today. back to you. dagen: thank you, nicole. connell: house republicans pushing for legislation requiring president obama to submit a plan for a sustainable balanced budget. dagen: groundhog day. connell: yeah. dagen: rich edson joins us live from washington, d.c. with more. >> reporter: hey, how's it going? republicans are writing a budget they say will balance the federal books in ten years without an increase in taxes. on wednesday they'll vote on this bill requiring president obama to reveal when his budget will return the government to balance. the next budget fight is on in d.c. the white house is again missing its budget deadline legally set for today. when the administration does release it, it will likely include what republicans say is already resolved, tax revenue increases. as the president mentioned last night in many an interview -- in an interview with cbs. >> the average person doesn't have access to carried interest
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income where they end up paying a much lower rate on billions of dollars that they've earned. so we just want to make sure that the whole system is fair, that it's transparent and that we're reducing our deficit in a way that doesn't hamper growth. >> reporter: the response from house speaker john boehner's office? the president got his revenue, now it's finally time to make the reforms necessary to save our entitlement programs. any tax loopholes we close should be used to lower rates for all taxpayers so we can be more competitive and create or more jobs. automatic spending cuts hit the federal budget march 1st. less than four weeks later, a large portion of federal spending authority expires. if democrats and republicans fail to resolve these tax and spending differences, the government is headed for those across the board spending cuts and a government shutdown. back to you. connell: rich, thank you very much. rich edson in d.c. dagen: let's bring in david stockman, former economic adviser to president ronald reagan. there's no urgency though.
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if we don't do something about our annual budget deficits and our longer term debt that we're accumulating, is it just going to be kind of a slow drip like where we bleed to death as a nation, where we don't really feel it until it's too late? >> no. i think you drift along until you reach an inflection point, and then it they ares up in -- flares up in an uncontrollable, disastrous way. so that's why i say this is a good idea, this bill, but they should be sending it to bernanke too and his merry band of lunatic money printers. because i believe, ultimately, they are the number one, two and three cause of this huge fiscal stalemate and this disastrous budget drift that we're in. when you tell the congress as the market is saying this morning, which is totally medicated by the fed, you can borrow 90-day money for seven basis points which is a rounding error, you can't even see it, or three years for 40 basis points, there's no you are -- urgency.
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they will never make any hard choices, and they'll never level and be honest with the public that we need both huge spending cuts as well as more revenue to get this deficit under control. number two, you don't have ten years. if you take an outlook for the next ten years identical to the last ten, in other words, an unrosy scenario, what really happened which wasn't very good, we're facing $15 trillion or more additional deficits, a built-in national debt that would be 30 trillion, 150% of gdp. that's where we're drifting. and this says balance it in ten years? you don't have ten years. they need to get to it right now, this year, next year with major cuts. connell: this argument, and you're right about being forced to do it and the reason there's no you urgency is because ratese so low, when do you see that changing? i think as you said at the outset of your remarks, it's not a problem until it's a problem. >> well, that's exactly right. greece thought it wasn't a problem until all of a sudden
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they couldn't borrow, the market closed. now, just because we issue our own money, it doesn't mean we can flood the world with 100 trillion worth of liabilities over time. there are limits to all of this, and i think the markets are beginning to get nervous already about how far the fed can go in this money printing. what they're doing right now 85 billion a month they're buying either of mortgage-backed security or treasury bonds, that is totally artificially suppressing the market, and i believe at some point they're going to be forced to stop. dagen: but on the flip side you have plenty of democrats who not on camera talk about debt's not a worry, we're not concerned with it. an article in the l.a. times last week said our biggest economic concern is not the debt and the deficit. and then you have people pointing to that weak economic growth during the fourth quarter where we went negative, and again it was because of government spending cuts. and no politician's going to let that happen even if you're a
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republican. >> well, that may be true, but the only reason we have even a semblance of recovery over the last three or four years is that we borrowed four or five trillion, laid the tab on the next generation, our children and the children to come, and it has been totally artificial. now, at some point we're going to have to begin reducing the deficit. when we do, the economy will be weak. that will make the deficit challenge even greater. it's a negative feedback loop. right now when all these democrats say, look, mr. market is saying go ahead, borrow, we don't square. that is not a really market. that's the echols building. that's one side of washington telling the other side, don't worry, i'm buying all the bonds. now, if you think this kind of ponzi finance is anything to do with capitalism or free markets or anything to do with sustainability, then you've read an economic textbook that didn't even exist in 1995. dagen: david, thank you so much. david stockman, i know it's like facelift. like the first few you get it
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kind of hides your age, but eventually you're going to look, well, 8 6. connell: hasn't thought of it that way, but as always, you bring up a unique perspective. dagen: what? i'm really 75. connell: well, you look great. the ftc is pressing for new guidelines on the mobile industry. dagen: and if your worried you -- if you're worried you missed out on the latest market run, we have a rep coming up on small market caps. first, a look at treasury markets, how cheap it is. less than 2% over ten years. crazy. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪
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>> i'm lori rothman with your fox business brief. shares of acme package are surging today after oracle announced it is buying the company. price tag, $1.7 billion. so the deal breaks down to 29.25 per share, that's a 32% -- 22% per share price on friday. oracle says it's basically an effort to capitalize on demands for all ip networks. chlorox shares getting a nice boost after second-quarter results topped expect takeses, making a profit of 93 cents a share.
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looking ahead, clear rock raises -- chlorox raises full share earnings. we'll be looking for yum brands outlook today after closing today, expected to share a revenue of 4.1 billion. that is the latest from the fox business network, giving you thc power to prosper. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪
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dagen: stock mutual fund inflows are hitting era levels with january seeing the biggest inflows since april of 2000. connell: liz macdonald has it for us in the bottom line today. >> reporter: when you look at the data, it's showing not just from the month of january alone for equity funds, but all in with etf equity funds, you're going to see levels not seen since 1996, well before when federal reserve chief alan greenspan made that crack about irrational exuberance. so this is the talk of wall
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street right now. we're seeing equity and etf inflows that have surpassed entire 2012 for all quarters. and we're going to see there are 51.7 billion flowing into all kinds of funds from the month of january alone. eighteen global markets worldwide are above the 20-month moving average. the last time we saw that was in 2009, and stocks charged ahead for a number of months into 2010 and also in '03 we saw that happen when 18 global markets were above the 20-month moving average. that's when you saw the bull market last about four years. but here's the deal, the 2007 top that we saw, the pe back then, 15 times earnings. now stocks are still cheap for the s&p 500 forward. they're at 13.4. so if we see 14.7, that's an s&p of 1600. if we see a floor pe of 15, that's an s&p of 1700. so that's the name of the game. we could hit that 1665 in the s&p by mid year, not year end.
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dagen: the only thing is these retail fund flows usually pick up at the very end of a run. like april of 2000, we've had the strongst month since then. that was right after the peak. and then it was, hello, bottom. >> yeah, that's a great point. we did see that. but again, the bears are still in the building. they haven't so much left the building. i hear what you're saying. and the question is what will bring this down, what will reverse the flows. of course, the pumping air to the market bubble from the federal reserve, that's the talk on wall street. connell: yeah. more throughout the day from e. mac. thank you, liz. dagen: the federal trade commission pushing for privacy controls for the quickly-growing mobile device business as more and more americans use their phones to, well, surf the internet and shop and you name it, they do it on their phone. connell: yes, they do. shibani joshi with the story. >> reporter: and take pictures with and tweet about the super bowl with. all of these devices we can't live without and have become ingrained in our everyday life.
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they're a big opportunity. they're also a big security threat. you know, as many as 217 million smartphones were sold globally in the fourth quarter of last year alone. it's a huge business, and as these device sales explode, so do the apps, the ads, the analytics that wrap around these devices. they also grow exponentially. now, the ftc realizing that there's an opportunity here and a risk decided to get involved, making some new proposals for the mobile industry going so far as to single out some well known names including google, apple, research in motion, microsoft and amazon in a new report. the problem is that a third of americans right now, according to this report, do not feel in control of their information on mobile devices, so the ftc in this report decided to provide some suggestions for the mobile industry including more disclosure, asking for explicit consent before accessing things like geolocation, even establishing a do not track
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program for smartphones in the way we have a do not call list. these, however, are merely suggestions. there are no penalts, this is nonbinding, but the ftc is looking closely at this and probably some sort of regulation on the horizon but not imminent at least for now. but, yeah, we do not know what the risks are as of yet, and this gives us a sense that they're just trying to get their arms around this right now. dagen: shibani, thank you for that. connell: let's go back to nicole. i know you have some post-super bowl movers for us. >> reporter: that's right. let's take a look at some of the names and companies that are related to the super bowl ads that we all saw. i'm sure you didn't miss all of them. you got something out of this. let's take a look at how they are faring. a lot of down arrows, doesn't necessarily bode well for those ads they paid so much money for them. but they certainly are in the top ten of popularity when you talk about the clydesdale and how what a great tear jerker
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that ad was. that was certainly my favorite. you also had best buy's 30-second ad with amy pohler who was asking question after question about electronics. you have doritos, taco bell, some of the senior citizens hitting the the taco bell. there's yum brands down 1.7%. also we'll keep an eye on pepsico as well. awedty, godaddy, samsung, hunday, i mean, they were understoodless, and a lot were -- obviously, they were fun to watch. there's anheuser-busch down over 4% today. connell: all right, thank you. dagen: favorite ad? connell: i don't remember any of them. the old people at the -- dagen: no, dodge ram. farmers, hello. celebrate america. connell: i just like elderly men
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with tattoos. dagen: thank god you have panels on. [laughter] connell: let's go to the markets, again, rough start to the week, but some individual stocks. we'll pick out some winners for you. cisco's doing all right today and some others at the nasdaq that are winners. we'll be right back. i'm a conservative investor. but that doesn't mean i don't want to make money. i love making money. i try to be smart with my investments. i also try to keep my costs down. what's your plan? ishares. low cost and tax efficient. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal.
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connell: all right. so an interesting day in the market. stocks are down, as we've been talked about. it's been tough going in the bond market, we've also talked about investors concerned maybe they missed the run in equity, so we have an argument right now
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to be made for small cap stocks. dagen: chairman and ceo of asset management. good to see you. small caps are up more than your other market gauges. the russell 2000 chosed at a record on friday. why would you bet on an already-hot group of stocks? >> i guess we should quit then, huh? [laughter] i mean, the game's over. dagen: there are always options. >> no, there's many options. here's the thing. i don't believe in buying markets. we don't. we believe in buying companies. we think there's -- even when things were terrible and i came on here, there's always opportunities. we see many, many opportunities. i love banks, regionals, the smaller the better. look, we saw what happened in the super bowl yesterday. nobody has told me one way or another if it was of a cyber problem or not, but it isn't surprising. you look at "the new york times," you look at everything. we're under attack, both our government and our companies. so i like companies that play in the space of cybersecurity. i think there are opportunities
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across the board. and if you're in this low interest rate environment where, my goodness, if somebody -- if i were a hedge fund manager today and somebody just plopped down and gave me a billion dollars, it's a very difficult -- you could go anywhere you want. you could go -- it's as difficult a time for new money that i have seen in 20 years. and so because of that you have to drill down into the individual names, you have to drill down into the individual sectors and businesses. and when you do that -- dagen: but if you're an individual investor, you don't have an option for doing that. >> you find somebody -- dagen: i don't have that option. >> well, if it's only 401(k). but then you have to find the option in will that works for you. as a bull, and i am a bull for long term for the marketplace, i still think in this move we're in the second or third inning. i do think, however, we're going to have some starts and fits, so i do think -- but the problem is, the problem is, is if you're not in, i think you have to start stepping in now.
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and that's one of the big problems. connell: by the way, on that second or third inning comment, it's intriguing to talk about some of the individual and the cybersecurity, we've done a number of stories on that lately. and by the way, we've got no indication of what happened at the super bowl, no reason it had anything to do about that. but you're right about "the new york times" last week, "wall street journal," but why do you make the comment about the second or third inning? people see the headlines, markets near an all-time high, man, i missed it. how do you finish. >> no, i don't think so. connell: why not? >> liz was on earlier talking about money flows and the mutual funds. that's a relative basis. one of the thing is the the money is not coming out of the bond funds. it's coming out of the cash portion that people have stored up. connell: right. >> and if you take a look, money's not coming out of bond funds. i think what's going to happen, if we continue in this type of marketplace, people are taking money out of -- by the way, i think bond funds are an extremely dangerous place for that individual investor you're talking about. i think there's more risk in
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those bond funds than any equity funds out there because i don't think people understand the risk they're taking when they have money in the bond funds where they can lose principal, okay? surprise, surprise, interest rates someday will go back up. dagen: if you hold a maturity --? >> that's a bond, right. dagen: every maturity, every bond fund also has an average maturity, so if you're willing to own that bond fund, it doesn't matter. unless they're forced to sell at a loss on those funds, if you hold that bond fund to the average maturity, you will get your principal back in theory if it's managed -- >> in theory, but that new money comes in, and money continues to roll, and they continue to make those maturities go out. i have no problem with people buying individual bonds. listen, here's the risk. the ten-year treasury for every 100 basis point move up in interest rates, 900 basis points -- 100 basis points, 1%, you can lose 3% in principal -- 8% in principal. now, you are correct, you can hold it for the ten-year period
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of time, but that's not a great proposition. and given that backdrop, the names we like and the things that i like, i think, are much better situations in a basket of those stocks than being in a bond fund. connell: all right, joe, good to see you again. >> nice seeing you. connell: all right. moving right along here. markets now and just when investors jump back into the market, the dow on track today for its biggest one-day drop of the new year. cheryl and dennis are ahead with their coverage. they have a major bear coming on who says watch out below, apparently. dagen: and those super bowl commercials, can't talk enough about that. kate upton, she was in that mercedes ad for two seconds. loser. her and mercedes. or were they? find out from dennis, straight ahead. [ shapiro ] at legalzoom, you can take care of virtually
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dennis: i am dennis kneale. cheryl: i am cheryl casone it as more investors jumped back into the market, the dow on track the biggest one-day drop of the year. scott martin says investors are struggling with where to put their money. dennis: chinese hacking on the rise in u.s. government businesses are the target. what the obama administration wants to do about it. cheryl: super blackout. who is responsible in what it will cost. dennis: this super bowl got the best ratings ever, into one the ad bowl? the best and the very worst. nicole petallides at the new york stock exchange up 149 on the dow. down now. nicole: a selloff day.
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you get some, you give some back. we are pulling back, down about 130 points right now. we're not looking at dow 14,000 like we were on friday. a monumental day for all of those after five years from 2007 when i have been waiting and finally got it. today a different story, there are concerns once again about europe and as a result the dollar gaining strength, and that weighs on the market. take a look at blackberry, a name in the headlines, selling off dramatically and now we have endless coming out and talking positively putting it in saying obviously they are believing in the company, the price targets $22 up from $12, and the stock is really jumping today. cheryl: a little late to the
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party. but we will take it, at least the shareholders will. we will see you in 14 minutes am now. more money hit the market last month then since the dotcom era. $20.7 billion of inflows recorded in january, the most since april of 2000. my next guest says this is happening despite what is happening in the u.s. economy. chief marketing strategist is here. he say this is despite the economy does not look good in your opinion, scott. what is the problem? >> take your pick. one thing that directly affects consumers is wage growth. it is nonexistent, it is flat to just slightly up, and if you adjust it for inflation it is not up, actually negative. people don't have as much money,
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so they're not putting as much money into stocks because they know the economy is not great. cheryl: we have seen the housing market continued to recover and really turn around in many peoples opinion and he said unemployment number kind of jumped up little bit. still, these inflows and the movement into the equity market, is that because cash has been on the sidelines and people want to go to work or is it the bond market is at such a bad option right now? >> i think that is totally it. flying faster than can be counted. with the money market rates near zero, it has to go somewhere and the way to get the return with dividends included is the equity market, so you have to go in if you are in a bind because you don't want to see the deterioration go up in both the u.s. and other countries. look for something and that will be equities from dividends.
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cheryl: i see your point about this being the lesser of two evils. certainly a lot of companies are beating. do you stick with this? >> i think high-yield bonds have been pretty good, given we have an equity return with half the volatility. like all of the funds because high-yield bonds, high-grade corporate, u.s. treasuries, those fields are down around two, three, you can still get seven, 89%. not a lot of volatility. cheryl: were looking at those charts. the return of the last three months return has been negative.
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i'm asking if you are staying with them, it seems a lot of money has moved away from that play. >> is more of the high-grade. look, i think they still do have a higher yield than a treasury bond does, which you'll start seeing a lot of outflows coming from. cheryl: on a day like today our viewers will feel the same way seeing the dow down 136 points, you have a couple of plays, sector plays if things go south in the market. >> consumer staples, people have to buy shampoo, toothpaste, even though it had been in new orleans. good dividends and act defensive when the market gets nasty. cheryl: i will be a little bit more picky than i would have been yesterday or friday, that is a good point.
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we will be following your pics. thank you. dennis: president obama in an interview before the super bowl said more tax revenue needed to fix the deficit. >> there's no doubt we need additional revenue coupled with smarter spending reductions in order to bring down the deficit. we can build them in a gradual ways it doesn't have a huge impact. dennis: the president continues to push for more taxes, the chief political strategist says the presidents rhetoric is shifting. i saw that obama interview yesterday with the president and kept thinking my gosh, he is saying the same thing over again, why is he talking about growth in tax revenue versus growing the economy. you see something optimistic here. >> he never specifies what the spending cuts will be. always make spending cuts. on revenues, think there has
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been a real shift, they have stopped talking about big, huge chunk of taxes on the rich. we are back to talking about these cats and dogs, corporate jets, carried interest, oil and gas industry stock, if that is what they are reduced to that is a good story because investors and taxpayers can pretty much count on no new tax increases on most americans. dennis: i think it is awfully optimistic of you. what were raised before that are not raised now? president abou obama hoping for. that is what they're doing. >> i think before they were thinking of tax reform as a guise for raising a big chunk of revenues. let's kill the mortgage deduction, state and local taxes, muni bond exceptions, that is all off the table now.
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dennis: i could swear i heard the president himself said during the debate we have to cut the corporate tax rate. where is that discussion gone? >> not very far lately. both are scaling back. they realize the tax reform is very unlikely. again, we will get cats and dogs. it has taken long enough. but the really big stuff now is off the table. dennis: what about the idea of slashing corporate tax rates on our companies keeping tax overseas. they insist on taxing it a second time when it comes over here. i have seen some rumblings that maybe president obama will soften his stance against that. >> he might in the context of general corporate tax reform. this is with gun control, sounds
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great, but we all like it. then you come up with the details and they are really daunting. dennis: i like your optimism they will not be a if they tax increases coming. what about the mindset for businesses we see the president went before the super bowl talk about more tax revenue instead of how to grow the economy. when president bush cut taxes, revenue grew 46% in the next four years over 26% increase in government spending because you helped grow the economy. >> exactly. he will sa talk about new taxesn business. it will not happen. one of the other big changes is republicans who looked so bad in december, disorderly retreat, the republicans are not going to cave again. they are amazingly unified, so i think the bottom line is major new tax increases.
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dennis: thank you very much. cheryl: energy giant halliburton getting greener. the company is offering what it says is a non-toxic franking fluid made with fda ingredients. it is more expensive than other fluids that is safer for the environment environment for groups applauded the latest effort to help make fracking safer but they still don't hav e questions about it. look at halliburton down right now. from going green to making green. the international airport at jackson rated the best airport for business travelers. the survey of 1000 travel agents looked at everything from wireless internet access to food choices. the top spot with 125 eateries, many retail stores have a business that runs small rooms
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for a quick nap. it is the busiest in the world with 250,000 travelers coming in every single day. dennis: it would be better among travelers and travel agents, but okay. union membership down across u.s., it may be growing in all places in china. surprising details ahead. cheryl: china-based hackers are increasingly going after major american companies. with the obama administration is proposing to deal with this increase. dennis: record amount of viewers are turning in for the blackout bowl. coming up. cheryl: and take a look at oil, we are down substantially today. part of this is an inventory forecast. we will be right back.
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cheryl: 15 past the hour, stocks or 15 minutes. we have jeff flock standing by at the cme watching gas prices rising and a lot more. sandra standing by at the data wizard looking at earnings and charles payne showing us how to make money on pharma. first up, nicole on the floor of the new york stock exchange where the rally has taken a break down 127. nicole: it really has taken a break. we have been over the unchanged line so many times in january, making higher highs and higher lows, setting new highs like 14,000, which we all remember so well on friday. we have since taken a breather and traders expecting exactly that. so many times throughout the last couple of weeks and january kept hearing the ter term " "overbought."
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not a surprise for a pullback. and making new highs. i still think 2013 will make new highs but they seen selling across the board, the dollar started to you has been gaining momentum. the dulles to the highest points of the day pressuring the market as well. 28 of the 30 dow components in the red. jeff flock, what is going on there? jeff: the market under pressure here as well, nicole, but gas prices is the headline. can you feel it? take a look at the national average. prices down today, but i tell you take a look at these numbers from the energy information agency, how much gasoline has taken a bite out of our income. it is the highest for three decades, almost $3000 per year
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we are spending on gasoline. going up fast. our household income. it is really taking a kick out of it. they're both down, but the headline is higher energy prices. what about earnings, what is going on? sandra: i have a picture of the dow, the dow on the unbelievable run vista with the exception of triple digit selloff we had. a lot of that thanks to earnings impressing those on wall street. take a look at the percentages so far, companies that are beating analyst expectations on wall street. companies have beat expectations. 66% of companies have beat expectations on the revenue side.
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the top performers, clorox hitting an all-time high of the cup an became a purported profip 17% in the latest quarter because it is a flu outbreak. all of those things boosting their profits, the outlook was very rosy and lastly after the bell tonight, there are some concerns setting with earnings. yum brands came out and warned on earnings cannot be as good as everybody as predicted because of a slowdown in china, guys. the stock down 1% with earnings after the bell tonight. back to you. dennis: we are making money with charles payne. charles is taking a look at a global health care provider one of the few winners. charles: this com comment was founded in the late 1800s, hot stock more recently and the reason it has been execution is management is fantastic. operating margins 13.8, last
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year 21.6%. a phenomenal company, consumer health care wanted. we look at pet care. anybody with a pet knows sergeants announcing a missed that can give your pets their medicine. i don't know if you tried to give your dog a pill. or even try to give me a pill. cheryl: morgan stanley upgraded this morning. charles: i am shocked, i love for the stock is at right now. global growth, some issues with some of their vitamin products losing a little bit of share, but they made it up in a whole lot of other areas. technically to the upside, $120 per share. cheryl: thank you, charles. chinese hackers are stepping up
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their cyber attacks and u.s. businesses in government, so will this prompt the governmen a administration to prompt action? dennis: and how much jal is to accompany the lost flight revenues. first, how the world currencies are faring against the u.s. dollar. to grow, we have to boost our social media visibility.
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>> 23 minutes after the hour. in alabama is now seven days a gunman has been holding a fibril boy hostage in a bunker. 65-year-old shot and killed a school bus driver, took the boy remains underground with him. the boy identified only as even will turn six on friday. eight people are dead in a tour bus crash. the bus careening out of control 80 miles east of los angeles. 40 people injured. the cause is unclear but the driver survived reported brake problems. and this is the first day on the job for new secretary of state john kerry.
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following hillary rodham clinton and her predecessor. addressing this as the same going. that is your fox news minute. cheryl: those heels were walking. dennis: strong reaction against recent cyber attacks and major u.s. companies. cheryl: peter barnes in washington with details on this and what the administration plans. this is china-based hackers. what does mr. obama think he can do here? >> what cyber experts say doesn't go on without the expletive or intuitive report of the chinese government so that is one of the big issues here. a new u.s. intelligence report is expected to call the rising chinese cyber attacks a threat to the u.s. economy.
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after noting recent attacks on their computer systems suspected of originating from china. social media site twitter said extremely sophisticated hackers from unidentified source may have stolen e-mail names, passwords, 2000 customers. they have made little progress in negotiations with the chinese to stop this kind of hacking. by the u.s. is considering economic and diplomatic steps to prevent it and according to the financial times, more information sharing between washington and private companies to protect critical systems and infrastructure like power grids and medication systems. >> we have had and have been very clear about our substantial and growing concerns about the threat of economic and national security posed by cyber intrusions including financial information.
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we have been clear with the government of china that we need to continue to talk about this. >> ministers officials will not comment on the cyber security plans. chinese officials again deny china is behind these cyber attacks. cheryl: the two are working hand in hand, will. peter barnes, thank you very much. japan airlines saying it is grounding the boeing grandmother will cost $7.5 billion in lost revenue. they grounded after the batteries emitted flames and smoke. seeking compensation for that loss. investigators have yet to identify the cause. the stock down $0.17, but look, the stock has been under a lot of pressure as this continues to
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be a major pr nightmare and physical nightmare for the company. dennis: and let's talk, a bear debate and if you want to buy, sell or hold. cheryl: the super block out bowl. what is going on with the investigation would have been with the going out in what was a pretty good game. dennis: the s&p winners and losers.
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now, check out the stocks to watch, the market right now looking at mcdonald's at $94.83. down 1.1% for the dow component today. the headline we have been watching, mcdonald's is now introducing fish bites going into the happy meals. they found out this is something that will do well for mcdonald's in happy meals. we want fish. i can tell you off the record my kids are not going for the fish. let's take a look at the major market averages, dow jones industrial's down 130 points, that is worth almost one full percentage point. pressure on the nasdaq and the s&p 500 on a day the dollar has been incredibly strong. a lot of concerns about europe, talking about political uncertainty, something that factors in as well, we continue to watch the euro weaker and the
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dollar gaining. back to you. dennis: union membership down across u.s. but things may be growing of all places china. landmark union admissions. workers will be selecting their own union representative scene is a powerful sign of changes demanded by increasingly powerful chinese workforce and why the wood going to a cheaper market. cheryl: speaking of apple, it has been a roller coaster ride actually down for shareholders of this company. joining me now, howard rosenkranz. howard, you say this company is not only in trouble, but iphone is down, what do you mean by that? >> googl google can be other dot operating system, the android licenses everybody.
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matter how deep apple's resources are, everybody's coming after them, everybody looking at 50, 60, 70% gross margins that are unsustainable. a number two market cap and google itself at the end of the year will start producing their own smart phone. google doesn't need this to be the single profit entry. cheryl: you have to look over the last year. january, the best month since 1997. apple, the worst performance of the s&p 500, yet you are saying great buying opportunity. why? >> prices will come down, this is typical of every technology cycle we ever see. we're in the midst of that right now. we are enduring that right now. this stock is ridiculously cheap. here is a company that is the return of capital in the high 20s, in the 30s for the last
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year, company that has a huge instalinstalled base, so apple t going away. >> they're going from 40 to 20. this is a hardware company. >> the margins will go down. the question is why did they go down the last year. >> look at their major customers, they absolutely hate them. the major customers are the phone companies, paying them $600, sell it for 200, they lose 400 on the front end, the samsung, the episcopal hundreds of dollars, everybody else they lose a lot less were they lose nothing. it is already a mature market. there's no reason i can dominate this world, no reason the phone
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companies will continue to pay them into the ransom is over. >> they sold almost 49 million iphone is in the quarter, that was up from 38 million, so there are people still buying those phones. it is obvious it is not just two or 3% growth which you would normally see in a mature market. the numbers are kind of disproving the theory. look at the ipad, and look at the industry numbers. you say it is mature. they expect this market to triple over the next three years. >> profitability. despite the bump in sales. who is going to want to buy this stock when the earnings and market is going like this. >> the rates we have seen this going to come down. the question is how quickly will that come down? investors are thinking apple will just collapse. that is not the case, we're
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still seeing enormous category growth, earnings will be fine, they will come down somewhat. the question is at eight times or 10 times, whatever metric you want to use, is that reflective of apple's growth opportunities that should grow 15 to 20%? cheryl: it is almost do i buy apple and short the nasdaq? but they're like $2 billion of market cap, with the stock fall that we have seen. thank you to both of you, appreciate it, great stuff. dennis: super commercial bowl. in the media minute. cheryl: and in your "west coast minute," california could get a huge shot in the arm. dennis: first, a look at ten-year treasuries. all stations come over to mission a for a final go.
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and boosting factory orders with durable goods revised lower to increase the 4.3%. get ready for fish bites. mcdonald's offering them as the first new happy meal entry in a decade. mcdonald's says they will be widely available at u.s. restaurants starting this week. that is the latest from the fox business network giving you the power to prosper. [ male announcer ] at his current pace, bob will retire when he's 153, which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on hisortfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade.
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it's delicious. so now we've turned her toffee into a business. my goal was to take an idea and make it happen. i'm janet long and i formed my toffee company through legalzoom. never really thought i would make money doing what i love. [ robert ] we created legalzoom to help people start their business and launch their dreams. go to today and make your business dream a reality. at we put the law on your side. cheryl: super bowl ratings up 1% from last year's game making it the highest-rated game in history. millions of those viewers watched the game go dark shortly after the second-half kickoff, a power outage at the superdome brought play to a halt for 34 minutes. baltimore coaches were upset at the changed the momentum of the game. the outages blamed on an
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unspecified power abnormally. the supplier of power to the stadium is investigating the root cause of this and things were certainly bright for twitter. when it comes to twitter, twitter was featured in 26 of the 52 nationally aired commercials last night beating out facebook only featured in four adds. dennis kneale knows what that means. dennis: i sure do. ravens win the super bowl but who one the ads war? we have the first results of a nationally projectable survey of the viewers who saw the ads and rated them. peter, ceo of asymmetric, the firm that did a survey last night joins us with a first on fox business interview. thank you for being with us, peter. let's start broadly, what do you think this year versus last year?
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>> i think it is similar in a lot of respects. the overall scores were down a little bit, but like every year there are some out of the park home runs and some that are just terrible and that is kind of what we saw last night. dennis: it is fun to focus on the terrible, but the best first. you say calvin klein is one of the worst of all time, you rated on a scale of 150 the top score and it came in at 362. why is that? >> it is just terrible. obviously they didn't get the memo last year they virtually identical ad, nobody wants to see a naked man on tv. it didn't do well with women, didn't do well with men. they didn't test it, it came i n the lowest scoring ads we have ever tested. dennis: it felt me depressed for the body i will never have. now this ad for godaddy.
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they make out scene between a gorgeous blonde and a geek. take a listen to this sound for a moment, take a listen and you will hear it. [slurping effects] dennis: i can't imagine how some sound guy had to come up with those gross face sucking sounds. >> godaddy has a habit of killing ads. this was one of the worst. the american public says the most popular word they use for describing this ad is gross, you know something is wrong. it might have a little bit of social media buzz, but the viewing public 110 or more million people watching this ad, it was disgusting. dennis: they are randomly sampling projectable surveys sut the national sentiment.
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that goes to the best of the best and let's talk about the very best highest-rated ad, the wonderful baby clydesdale ad for budweiser. >> that is right. the real home run in the super bowl over the past years have been emotional quality, humor quality or animals. otherwise i killed it with two of the three. very emotional story but it did extremely well. when we really look at rating a couple of key dimensions or likability and attention across broad demographics. that is what you see, almost everybody loves this ad. dennis: like you said, it is fair to sell the brand and that heritage. tell us about the coca-cola security camera ad. i thought it was violent images or something disturbing and
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that's what they wanted us to worry about at first. >> exactly. but when actually wasn't a new ad, but that was brilliant. did much better than the whole coca-cola chase thing that followed. they knew that was a really strong ad and it wound up being number three in our rankings. dennis: all right, that is great stuff. probably working all night, thank you for bringing it to us first today. >> thank you. cheryl: with a horse came running down the street, waterworks done, overcome it was awesome. the quarter until the top of the hour. nicole petallides a standby at the new york stock exchange. we want to talk about the super bowl continuing the party. nicole: i was wiping the tears away as well. i have to be honest. i want to talk about dell right away.
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down 3%, it has been losing its momentum throughout the day. following so closely on the buyout possibilities, and now we're learning in the last few minutes they are expected to invest around $1 billion in this buyout. microsoft expected to invest about $2 billion in the general buyout negotiations focusing on 1350 up to 1375 per share. that is down about 3% right now. according to these sources crossing dell talks in the final stages and an outcome is expected very soon. we will continue to follow very closely. herbalife said they are not part of this basically some sort of probe, however there is some sort of law enforcement firm on herbalife. they have been very volatile, headline driven particularly since the middle of december
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when we started to hear it was some sort of a timid scheme to a certain extent. down 3.6% on news headlines and a name that has been moved around a lot on each headline. back to you. dennis: thank you very much, nicole. the g.o.p. pushing for a balanced budget. cheryl: and there is this, joining solar and wind power as an alternative energy source. dear. beer. yes, beer. how about you have a few names. a big charles payne pic today. we will be right back.
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cheryl: it is time for your west coast miss. california could soon surpass north dakota and texas when it comes to shale oil production. two-thirds are located in southern and central california. a massive untapped amount. if new technology is put to use previously untouchable oil reserves would be unleashed in california would be the top crude producing state. stand by. the solar industry booming in california now that the state mandating 33% illiteracy be derived from renewables by 2020. 100 solar plants have been proposed, the equivalent of 470 disneyland theme parks.
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the alaskan brewing company getting into the alternative energy gaine game did nothing to with solar or wind power. they installed a furnace that burns leftover waste from the beer making operation. they're getting power to make beer from beer. and that is your "west coast minute." dennis: people get their power from their beer. cheryl: this morning's power, the beer they took in. dennis: it is said california to be the biggest producer and california is so greedy to inhibit all that production. that the nation's capital where house republicans have the president's plan for a balanced budget. threatening legislation to make them do it. cheryl: rich edson with more on this story. rich: today is budget deadline day for the white house and the president is supposed to release the budgee.
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in a statement john boehner says for the fourth time in five years, this white house has proven it does not take a trillion dollars deficit seriously enough to submit a budget on time. in contrast they would be power obligations and tax another budget in the coming weeks that addresses our spending problems that promotes expanded opportunities for all americans. it is well past time for the president to do his job. republicans say they're budget would balance the books without raising taxes. president obama says the next budget deal should include tax increases. >> close loopholes and deductions that folks have a lot of accountants and lawyers can take advantage of so they end up paying lower rates, the bus driver or cop, close some of those loopholes. if you combine those together, we cannot only reduce our
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deficit but we can continue to invest in education and research and development to help us grow. >> they paid lower capital gains rate, they're trying to reach a budget deal to avoid those automatic spending cuts known in the sequester to begin hitting the federal budget next month. back to you. dennis: thank you, rich edson. cheryl: a giant leap for iran? sending a monkey into orbit. now we're hearing iran's president wants to be the nation's first astronaut. state news agency says they want to sacrifice their life as a space program. placplace the cursor to to space within the next five to six years, but i don't think the monkey is real. never coming back.
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and never coming back. all right, back to these markets. dow down 121 on the heels of an incredible january. best since 2000. melissa and lori coming up next and what is dragging out today's market and if the trend is continuing. dennis: one-day decline is not a trend, but struggling to find qualified workers. coming up, the man who is training the troops to fight cyber wars.
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